Zoetis (ZTS) closed the most recent trading day at $78.71, moving +1.88% from the previous trading session. This move outpaced the S&P 500’s daily gain of 1.09%. On the other hand, the Dow registered a gain of 0.14%, and the technology-centric Nasdaq increased by 1.91%.
The stock of animal health company has fallen by 3.07% in the past month, lagging the Medical sector’s gain of 3.16% and the S&P 500’s gain of 0.29%.
The upcoming earnings release of Zoetis will be of great interest to investors. The company is predicted to post an EPS of $1.85, indicating a 5.11% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.49 billion, up 1.39% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $6.91 per share and a revenue of $9.75 billion, representing changes of +7.8% and +2.96%, respectively, from the prior year.
Investors should also pay attention to any latest changes in analyst estimates for Zoetis. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.23% upward. As of now, Zoetis holds a Zacks Rank of #4 (Sell).
Digging into valuation, Zoetis currently has a Forward P/E ratio of 11.18. For comparison, its industry has an average Forward P/E of 16.05, which means Zoetis is trading at a discount to the group.
Also, we should mention that ZTS has a PEG ratio of 1.2. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. The Medical – Drugs was holding an average PEG ratio of 1.57 at yesterday’s closing price.
The Medical – Drugs industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 149, finds itself in the bottom 39% echelons of all 250+ industries.
